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Thursday, 17 November 2005

The IPKat has learned from Reuters that Lego has failed in its attempt to enforce its trade mark for the design of its building blocks in the Canadian Supreme Court. In a strongly worded decision, the court found in favour of Lego’s rival MegaBloks. The court showed its displeasure at Lego’s previous market dominance, saying

"The monopoly on the bricks is over, and Mega Bloks and Lego bricks may beinterchangeable in the bins of the playrooms of the nation…Dragons, castles andknights may be designed with them, without any distinction"

and

"(Lego) is no longer entitled to protection against competition in respect ofits product. It must now face the rigors of a free market and its process ofcreative destruction."

The idea that a company should not be able extend the monopoly granted by a patent that has since expired by relying on trade mark rights appears to have been at the forefront the court’s mind.

The IPKat is in favour of leaving this one to consumer perception. If consumers are confused, then it’s right to protect, them, even if the thing that they were confused about was once protected by a patent or other IP right. The existence of the other right doesn’t take away the justification for giving the trade mark right.

1 comment:

http://www.lexum.umontreal.ca/csc-scc/en/rec/html/2005scc065.wpd.html IPkat commented: "The existence of the other right doesn’t take away the justification for giving the trade mark right."

As I read it the Court's decision is based on the premise that there never was any justification for giving the trade mark right.

Lego was claiming a trade mark on the functional features of the object, and not as a source indicator. As such the trade mark claimed was invalid (which is why it was an unregistered trade mark, having been previously rejected when Lego applied to register the mark).

The long expired patent was for the same functional aspects as what was claimed to compose the unregistered trade mark. As such, the existence of the patent was factual evidence that what was being claimed was an essential 'utility' aspect, and not a source indica aspect of the product.

If a TM could be claimed on the functional aspect, then no other competitors could ever enter the market. This was worse from a policy perspective than the minor risk of consumer confusion while consumers sorted out the source of new market entrants. (Note also that on the facts the trial judge found there had been no confusion, given the way the products were distinctly marketed, named and packaged).

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